The EU Carbon Border Adjustment Mechanism: Impacts and Strategies

The construction and industrial manufacturing industries will experience high impacts due to direct emissions associated with goods like steel and cement. Agriculture may also be heavily affected since the CBAM covers emissions related to fertilizer production, potentially impacting sourcing choices for growers. Logistics companies will face challenges and potentially reduced demand for their services due to increased bureaucracy.

To prepare for the CBAM's introduction, organizations should carry out an initial impact assessment, establish processes for collecting emissions data and build reporting processes. Long-term approaches to mitigate disruption include monitoring price fluctuations, logistics challenges and shifts in production strategies and staying informed about changes in CBAM regulations, which may expand to cover additional goods over time. Maintaining high-quality supply chain data will be crucial to avoid reporting challenges and costly fines.

To delve deeper into this topic and stay ahead of market and production shifts, read the full blog here.